unit 2 micro
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7 Terms
1
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substitutes and complements
sub: one good or the other
complement: both goods together
2
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price elasticity of demand
% change of Qd / % change of price
3
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elastic demand
consumers highly responsive to price change
PED > 1
4
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inelastic demand
less responsive to price change
PED < 1
5
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unit elastic
% change in Qd = % change in price
PED = 1
6
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perfectly inelastic
consumers buy same amount with price change
PED = 0
7
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total revenue test
change in total revenue after price change
elastic: price up TR down; price down TR up
inelastic: price down TR down, price up TR up
only work for demand
Note 
Flashcards (95)